EU Investigates Tech Giants for Non-Compliance with Digital Markets Act: Will this Time Be Different?

New investigation proves EU’s commitment to regulating digital giants

The European Union’s (EU) Digital Markets Act (DMA) has come into effect, and the world’s largest digital companies, including Google’s parent company Alphabet, Meta (formerly Facebook), and Apple, were given until March 7 to make changes to comply with the regulation. However, despite claims from these companies that they had made changes, the EU Commission remained unconvinced.

On Monday, March 25, the Commission announced that it suspects Google, Meta, and Apple are still not acting in accordance with the regulation. As a result, an investigation has been launched, and potential fines could reach up to 10 percent of the companies’ global turnover. The goal is to bring these digital giants under control and ensure compliance with the new regulations.

The traditional fines imposed on these companies in the past have not been effective in curbing their behavior. For example, the EU fined Apple 1.8 billion euros for abusing its dominant market position in the distribution of music streaming apps, but this amount was negligible compared to the company’s profits. The new Digital Markets Act gives the EU authorities the power to issue fines of up to 10 percent of a company’s global turnover for violations, which could have a more significant impact on these tech giants.

The regulation also includes structural remedies, such as forcing companies to sell certain parts of their business operations if they continue to violate the rules. The authorities can now intervene proactively to prevent anti-competitive practices and ensure a fair digital market. This approach is a departure from traditional competition laws that tend to intervene after the fact.

The new legislation aims to prevent dominant companies from stifling competition and innovation, as seen in the case of tech giants favoring their own services over competitors. For consumers, this can result in limited choices and potentially higher prices. By taking a proactive approach and implementing strict regulations, the EU hopes to level the playing field in the digital market and prevent abuses of power by these companies.

In conclusion, while there have been legal battles against big tech companies in other countries such as antitrust suits against Meta and Apple by FTC in US , EU’s Digital Markets Act sets a precedent for proactive market regulation that could serve as a model for other nations . By enforcing these rules , EU aims to protect consumers , promote fair competition , and prevent consolidation of power by digital giants .

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